question 1

George wants to get rid of his old car so he can purchase a newer model. He has figured out that he will not accept a price lower than $3,000, but a buyer offers to pay $5,000 for the car. How much producer surplus will George receive from this sale? 0 $3,000 0 $2,000 0 $5,000 0 $8,000 The people of a certain Mediterranean village always eat salad with balsamic vinegar and olive oil as dressing. If the olive crop fails one year because of a terrible storm, what most likely would happen to the demand for balsamic vinegar that the people of this village purchase? O The demand for balsamic vinegar purchased will decrease because it is a complement to olive oil. O The demand for balsamic vinegar purchased will decrease because it is a substitute for olive oil. The demand for balsamic vinegar purchased will O increase because it is a complement to olive oil.The demand for balsamic vinegar purchased will 0 increase because vinegar and olive oil are substitutes. \fIf demand becomes more elastic, which of the following will happen, as demonstrated by the graph shown here? Q The incidence of the subsidy on the consumer will increase. 0 The incidence of the subsidy on the producer will decrease. O The incidence of the subsidy on the consumer will decrease. Both producer and consumer will receive the incidence of the subsidy in equal amounts